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Flextronics International Ltd (NAS:FLEX)
Beneish M-Score
-2.19 (As of Today)

The zones of discrimination for M-Score is as such:

An M-Score of less than -2.22 suggests that the company is not an accounting manipulator.
An M-Score of greater than -2.22 signals that the company is likely an accounting manipulator.

Flextronics International Ltd has a M-score of -2.19 signals that the company is a manipulator.

FLEX' s Beneish M-Score Range Over the Past 10 Years
Min: -6.74   Max: 1.16
Current: -2.19

-6.74
1.16

During the past 13 years, the highest Beneish M-Score of Flextronics International Ltd was 1.16. The lowest was -6.74. And the median was -2.49.


Definition

The M-score was created by Professor Messod Beneish. Instead of measuring the bankruptcy risk (Z-Score) or business trend (F-Score), M-score can be used to detect the risk of earnings manipulation. This is the original research paper on M-score.

The M-Score Variables:

The M-score of Flextronics International Ltd for today is based on a combination of the following eight different indices:

M=-4.84+0.92 * DSRI+0.528 * GMI+0.404 * AQI+0.892 * SGI+0.115 * DEPI
=-4.84+0.92 * 1.1548+0.528 * 0.8837+0.404 * 2.0376+0.892 * 0.9137+0.115 * 1.0566
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.1512+4.679 * -0.0254-0.327 * 0.9905
=-2.19

* All numbers are in millions except for per share data and ratio. All numbers are in their own currency.

This Year (Dec15) TTM:Last Year (Dec14) TTM:
Accounts Receivable was $2,585 Mil.
Revenue was 6763.177 + 6316.762 + 5566.248 + 5951.6 = $24,598 Mil.
Gross Profit was 452.467 + 396.916 + 352.341 + 378.817 = $1,581 Mil.
Total Current Assets was $8,957 Mil.
Total Assets was $13,050 Mil.
Property, Plant and Equipment(Net PPE) was $2,240 Mil.
Depreciation, Depletion and Amortization(DDA) was $518 Mil.
Selling, General & Admin. Expense(SGA) was $881 Mil.
Total Current Liabilities was $7,152 Mil.
Long-Term Debt was $2,741 Mil.
Net Income was 148.91 + 122.977 + 110.85 + 135.112 = $518 Mil.
Non Operating Income was -44.415 + -45.748 + -33.174 + -91.113 = $-214 Mil.
Cash Flow from Operations was 277.777 + 299.719 + 362.276 + 124.61 = $1,064 Mil.
Accounts Receivable was $2,450 Mil.
Revenue was 7025.054 + 6528.517 + 6642.745 + 6723.934 = $26,920 Mil.
Gross Profit was 408.657 + 377.081 + 380.785 + 362.144 = $1,529 Mil.
Total Current Assets was $9,133 Mil.
Total Assets was $12,090 Mil.
Property, Plant and Equipment(Net PPE) was $2,115 Mil.
Depreciation, Depletion and Amortization(DDA) was $524 Mil.
Selling, General & Admin. Expense(SGA) was $838 Mil.
Total Current Liabilities was $7,209 Mil.
Long-Term Debt was $2,046 Mil.



1. DSRI = Days Sales in Receivables Index

Measured as the ratio of days’ sales in receivables in year t to year t-1.

A large increase in DSR could be indicative of revenue inflation.

DSRI=(Receivables_t / Revenue_t) / (Receivables_t-1 / Revenue_t-1)
=(2584.909 / 24597.787) / (2449.773 / 26920.25)
=0.10508706 / 0.09100112
=1.1548

2. GMI = Gross Margin Index

Measured as the ratio of gross margin in year t-1 to gross margin in year t.

Gross margin has deteriorated when this index is above 1. A firm with poorer prospects is more likely to manipulate earnings.

GMI=GrossMargin_t-1 / GrossMargin_t
=(GrossProfit_t-1 / Revenue_t-1) / (GrossProfit_t / Revenue_t)
=(396.916 / 26920.25) / (452.467 / 24597.787)
=0.05678502 / 0.06425541
=0.8837

3. AQI = Asset Quality Index

AQI is the ratio of asset quality in year t to year t-1.

Asset quality is measured as the ratio of non-current assets other than plant, property and equipment to total assets.

AQI=(1 - (CurrentAssets_t + PPE_t) / TotalAssets_t) / (1 - (CurrentAssets_t-1 + PPE_t-1) / TotalAssets_t-1)
=(1 - (8956.604 + 2239.921) / 13049.518) / (1 - (9133.22 + 2114.681) / 12090.473)
=0.14199705 / 0.06968892
=2.0376

4. SGI = Sales Growth Index

Ratio of sales in year t to sales in year t-1.

Sales growth is not itself a measure of manipulation. However, growth companies are likely to find themselves under pressure to manipulate in order to keep up appearances.

SGI=Sales_t / Sales_t-1
=Revenue_t / Revenue_t-1
=24597.787 / 26920.25
=0.9137

5. DEPI = Depreciation Index

Measured as the ratio of the rate of depreciation in year t-1 to the corresponding rate in year t.

DEPI greater than 1 indicates that assets are being depreciated at a slower rate. This suggests that the firm might be revising useful asset life assumptions upwards, or adopting a new method that is income friendly.

DEPI=(Depreciation_t-1 / (Depreciaton_t-1 + PPE_t-1)) / (Depreciation_t / (Depreciaton_t + PPE_t))
=(523.759 / (523.759 + 2114.681)) / (518.179 / (518.179 + 2239.921))
=0.19851086 / 0.18787535
=1.0566

6. SGAI = Sales, General and Administrative expenses Index

The ratio of SGA expenses in year t relative to year t-1.

SGA expenses index > 1 means that the company is becoming less efficient in generate sales.

SGAI=(SGA_t / Sales_t) / (SGA_t-1 /Sales_t-1)
=(881.411 / 24597.787) / (837.961 / 26920.25)
=0.03583294 / 0.03112753
=1.1512

7. LVGI = Leverage Index

The ratio of total debt to total assets in year t relative to yeat t-1.

An LVGI > 1 indicates an increase$sgai= in leverage

LVGI=((LTD_t + CurrentLiabilities_t) / TotalAssets_t) / ((LTD_t-1 + CurrentLiabilities_t-1) / TotalAssets_t-1)
=((2741.474 + 7152.271) / 13049.518) / ((2045.569 + 7208.722) / 12090.473)
=0.75816938 / 0.7654201
=0.9905

8. TATA = Total Accruals to Total Assets

Total accruals calculated as the change in working capital accounts other than cash less depreciation.

TATA=(IncomefromContinuingOperations_t - CashFlowsfromOperations_t) / TotalAssets_t
=(NetIncome_t - NonOperatingIncome_t - CashFlowsfromOperations_t) / TotalAssets_t
=(517.849 - -214.45 - 1064.382) / 13049.518
=-0.0254

An M-Score of less than -2.22 suggests that the company will not be a manipulator. An M-Score of greater than -2.22 signals that the company is likely to be a manipulator.

Flextronics International Ltd has a M-score of -2.19 signals that the company is likely to be a manipulator.


Related Terms

Altman Z-Score, Piotroski F-Score, Accounts Receivable, Revenue, Gross Profit, Total Current Assets, Total Assets, Property, Plant and Equipment, Depreciation, Depletion and Amortization, Selling, General & Admin. Expense, Total Current Liabilities, Long-Term Debt, Net Income, Non Operating Income, Cash Flow from Operations


Historical Data

* All numbers are in millions except for per share data and ratio. All numbers are in their own currency.

Flextronics International Ltd Annual Data

Mar07Mar08Mar09Mar10Mar11Mar12Mar13Mar14Mar15Mar16
DSRI 0.95081.38450.5811.35120.90640.96261.01521.15320.86510.9367
GMI 0.99281.15431.03180.81930.91381.07031.04350.8970.93340.8975
AQI 0.94280.89740.26810.54170.75021.0181.59061.06471.09982.0565
SGI 1.23321.46171.1230.77911.18951.02470.8021.10771.00150.9339
DEPI 1.13440.77690.97890.91511.38680.89870.97211.22460.82191.1047
SGAI 0.9571.08471.00431.00580.89461.05281.14010.98070.96391.2108
LVGI 0.97511.14011.46190.96970.99060.98530.9661.05340.96880.9932
TATA 0.0125-0.1076-0.6331-0.0539-0.0224-0.0239-0.0747-0.0635-0.0123-0.0469
M-score -2.25-2.26-6.15-2.89-2.58-2.58-2.75-2.56-2.66-2.47

Flextronics International Ltd Quarterly Data

Dec13Mar14Jun14Sep14Dec14Mar15Jun15Sep15Dec15Mar16
DSRI 1.07361.15321.01240.91990.88040.86510.7941.09791.15480.9367
GMI 1.04530.8970.85510.84670.90890.93340.92570.90720.88370.8975
AQI 0.92391.06471.15131.24681.20151.09981.06151.61972.03762.0565
SGI 1.00151.10771.15291.14641.09081.00150.92990.91810.91370.9339
DEPI 1.23861.22461.17241.03740.84690.82190.86660.9871.05661.1047
SGAI 1.10070.98070.89010.85380.87080.96391.05551.10241.15121.2108
LVGI 1.0571.05341.00180.97790.97470.96880.97820.99640.99050.9932
TATA -0.0637-0.0492-0.0215-0.04-0.0049-0.007-0.0453-0.0358-0.0254-0.0441
M-score -2.72-2.49-2.41-2.55-2.49-2.63-2.98-2.45-2.19-2.45
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